Dairy demand for water surges LOUISE PREECE10 Mar, 2014 04:00 AM Print Increase Text Size Decrease Text Size Comments 0 Russell Pell: milk price key to being able to compete for water. A whole lot of other industries were now competing for water. Russell Pell: milk price key to being able to compete for water. LATEST Get autumn sowing right Inghams assets for sale No quality to ‘wine’ about Dairy demand for water surges Former station split Dairys big picture DEMAND for water is only going to surge, with an increasing number of industries competing for the sought-after commodity. That’s the opinion of Wyuna, Vic, dairyfarmer Russell Pell, who is also on the Murray Darling Basin Community Committee. He was part of a discussion about the water market at the recent Murray Dairy business forum in Moama, NSW, where he reiterated irrigators needed to be thinking hard about how they would acquire the precious resource in the future. In the past 12 months, temporary water prices had doubled in value, he said. “Nothing tells me it will get easier, it will only get tighter.” Mr Pell said a whole lot of other industries were now competing for water. “There is going to be ongoing pressure … that’s what happens when someone takes a large chunk of water out of the system,” he said. The dairy industry’s ability to compete on the water market depended on a strong farm-gate milk price. “I think we should be able to compete well, particularly if we stay at $6 (per kilogram milk solids) plus,” he said. The expanding cotton industry was a concern though, particularly because the lucrative crop was attracting high prices. He said water would now trade to the highest bidder. “If you are in an industry that is going along nicely, you’ll do well,” he added. “But if you are in an industry that’s doing it tough … you will be battling.” He said one way to achieve security was through leases. Non-farming groups and superannuation companies, which had entered the water market recently, would define the future of irrigation, he said. “Dairyfarmers are starting to go back and buy high security water, which is fantastic,” he said. “But if you are not going to do that, buy low (security) and fill it up, because otherwise you will be at the mercy of the start of next season.” Kilter Rural’s business development manager Rod Luke manages funds for a superannuation company interested in owning water entitlements.
Posted on: Mon, 10 Mar 2014 04:32:28 +0000
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